Mnuchin Says Trump Asked Harley Not to Move Jobs Overseas

(Bloomberg) -- President Donald Trump reached out to Harley-Davidson Inc. after the motorcycle maker said it would move some production overseas as a result of retaliatory levies implemented by the European Union, according to Treasury Secretary Steven Mnuchin.

Mnuchin’s “sense” was that Harley planned to move some production overseas prior to the tariff announcement, but he hasn’t spoken to the company directly, he said Thursday in response to questioning by Representative Maxine Waters in a hearing before the House Financial Services Committee. The California Democrat asked if Trump had requested that Harley keep jobs in the U.S., and whether the manufacturer turned the president down.

“No,” Mnuchin said. “He asked them afterward and I don’t know the status.”

Mnuchin said he will follow up with the Milwaukee-based company. Mike Pflughoeft, a Harley spokesman, declined to comment.

Trump began a days-long attack on Harley on June 25, hours after the iconic American company said it would shift some production out of the U.S. to sidestep tariffs the EU slapped on its bikes. The president accused the manufacturer of using the levies -- which were put in place in reaction to his steel and aluminum duties -- as an excuse to ship jobs overseas.

Absorbing Costs

Harley estimated that the EU’s tariffs would cost about $100 million annually, as each motorcycle shipped to Europe would incur about $2,200 in extra expense. Passing that on to dealers or customers would make an “immediate and lasting detrimental impact” to the company in its second-largest market, so it plans to bear most of the burden.

Harley already had been grappling with a years-long slump in U.S. motorcycle sales and said in January it would shutter its plant in Kansas City, Missouri, eliminating about 260 jobs.

The motorcycle maker, which reports second-quarter earnings on July 24, hasn’t specified which international plants will boost output for EU markets. Harley operates assembly plants in Brazil and India and will begin production in Thailand this year.

Harley shares rose as much as 1.2 percent Thursday but have fallen about 15 percent this year.

©2018 Bloomberg L.P.

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